More Interesting times in the markets, oy vey…

No sooner does Under the Money Tree comment to the effect of steady on – not so fast on my interest in Emerging Markets then he’s proved right and the Argies are in trouble (again) and there’s another bust-up in the markets. Is this Global Financial crisis part II or the backwash from GFC I. I’m sure Argentina has been here before in the late 1990s

Looks like no end of, er, fun 😦 On the upside, looks like 2014 could be the year of emerging markets, for those with strong stomachs and intestinal fortitude. Not in the results department, but I have very little EM in my ISA, because I started it when emerging markets were going to be the saving of the world. Now that people have forgotten all that and really hate emerging markets it’s probably one for drip-feeding.

I can take a breather until the next ISA year in April, then start to learn how drip feed investing works over with those people at Charles Stanley, as I have far too much with TD given the limited FSCS compensation limit. I don’t want to go into another financial crisis with shields down πŸ˜‰

So let’s take a look at what happened last time it all went titsup in Argentina.

their economy went down but didn't stay down
their economy went down but didn’t stay down

Now there’s a case to be made that they had it easier then, as the world started to pull out of the post-dotcom recession, and the price of some of their key exports went up. Argentina has a bad rep already for defaulting. Nevertheless, it’s been damn tedious in the markets of late, and 2014 was a bad year for actually buying anything new because everything was up in the sky. I’m all for interesting times in the markets, and we seem to be heading for some of that now…

11 thoughts on “More Interesting times in the markets, oy vey…”

  1. Sorry to be the prophet of bad news πŸ˜‰

    I agree with you that there are interesting times ahead. With QE about to start to wind and talk of interest rates going up it seems like markets are finally waking up form the self induced coma they’ve been in since 2008.

    I think what we will see in 2014 is an increase in volatility. The markets as they wake up will be driven more by news and numbers, like they used to be.

    I’m not a complete EM bear by the way…i’m just waiting for the right time and angle to pounce. I’ll likely be dripping to at some point soon!


  2. @UTMT Au contraire – I regard you as the bringer of good news. I am a net buyer for a few years, so I want to see the bottom fall out of the market. I’m happy to write off the losses on my modest EM stake so far in exchange for better value down the line. I am far too dev world biased at the moment!


  3. I think many emerging markets — and the whole group as an asset class — already look buy-able here.

    But they could easily halve again, so drip feeding has to be the best approach.

    It’s incredible how you just have to wait for a while in the stock market. Do you remember the arguments I used to have on Monevator ermine, with various people who told me I was a numpty for having any money in the UK and US because emerging markets were the future, China was eating our lunch, etc etc.

    Just 2-3 years, and it turns upside down.

    I have little doubt that as a group they’ll one day find favour again, and there was always a case of a big dollop *at the right price* so I expect they’ll be seeing a fair bit of new money from me over the next year or two, but it’ll have to be spare buy and hold money.

    I’d beware individual company plays (e.g. single country ETFs) as 1-2 will no doubt turn basket case. (Even Turkey, conceivably, the way thins are going). Diversification is the name of the game IMHO.

    @ The Money Tree — Can you can come shopping with me in town when I need to bag a discount? πŸ˜‰


  4. Do you remember the arguments I used to have on Monevator ermine, with various people who told me I was a numpty for having any money in the UK

    hehe – indeed. Some of the richest pickings seem to be in the ashes – starting my HYP when income ITs were on a discount, the fear and loathing of 2009, that whole Summer of Rage thing in 2011.

    One day I’ll get a chance to buy into the S&P500, but for now EM looks good. I guess the trick is not to be too fussy about a particular sector, try to get into what’s on sale this year.

    There has to be an article in that notion of being an opportunistic generalist in the accumulation phase πŸ˜‰


  5. The trouble is with giving the green light to that kind of thinking is time and time again it’s proven that people’s brains don’t buy cheap, they buy “chances”.

    They don’t see now: “Emerging Markets are cheap, this is my opportunity to buy and tuck away for 10-20 years”.

    They read then: “I was so lucky to hear about this opportunity in hot emerging markets. This is my chance to get in on the action.”

    Even if you knock them over the head with buying good value, they’ll buy the US because it’s good value “because the economy is doing well” rather than, say, Spain, because it’s cheap because it isn’t.

    I’ve retreated ever more from doing active-based stuff for this reason. I may one day do something in a members-only area or similar, with a paywall of some description, where I can curate who enters and police their takeaways! πŸ™‚

    Hey, we can all dream.


  6. I am of like mind and I plan to buy periodically through a few ITs like ALAI, HFEL and SOI where a reasonable yield may be had.


  7. @Monevator that sounded care-worn πŸ˜‰ And I don’t have the same responsibility for Britain’s investors so I might run the article. But I agree, I’ve done enough of the chances. And it’s still hard to fight the reptile-mind!

    The Monevator tipsheet – I can see it now (tease) πŸ˜‰

    @SG much appreciated – I’m building a research list for when the ISA year starts.


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